Destination XL Group Inc (DXLG) 2006 Q1 法說會逐字稿

Good day ladies and gentlemen, and welcome to the Casual Male first-quarter earnings fiscal 2006 conference call. At this time all participants are in a listen-only mode. Later there will be a question-and-answer session and instructions will follow at that time. (OPERATOR INSTRUCTIONS) I would now like to introduce your host for today's conference, Mr. Jeff Unger, Investor Relations.

Good morning. Thank you. On today's call we will have David Levin, President and CEO; and Dennis Hernreich, Executive Vice President, Chief Financial Officer and Chief Operating Officer of Casual Male Retail Group. I would like to read our forward-looking statement. Forward-looking statements contained in this and other written and oral reports are made based upon known events and circumstances at the time of release and as such are subject in the future to unforeseen uncertainties and risks. All statements regarding future performance, earnings projections, events or developments are forward-looking statements. It possible the Company's future performance and earnings projections may differ materially from current expectations depending upon economic conditions within both its industry and the country as a whole and its ability to achieve anticipated benefits, associated with announced cost reductions and strategic initiatives to the improved operating margins.

Among other factors which may affect future performance are standards in business relationships with end purchases, buyer from major customers or suppliers, including delays or cancellations in shipments, uncertainties surrounding timing, successful completion or integration of acquisitions, threats associated with efforts to combat terrorism, competitive market conditions and results, effects and sales in pricing. Increases in raw material costs, that cannot be recovered in product pricing and global economic factors including currency exchange rates, difficulties entering new markets and general economic conditions such as interest rates. The company makes these statements as of the date of this disclosure and undertakes no obligation to update them. Now I would like to introduce Dennis Hernreich.

Thank you, Jeff. And good morning, and thank you for joining us on this morning's call to discuss Casual Male Retail Group's earnings and performance for the first quarter of 2006. The Company's operating earnings during the first quarter improved to $2.4 million, and operating income which is up from $100,000 one year ago. On an operating earnings per share basis this year's first quarter amounted to $0.02 per share comparable to a loss of $0.03 per share a year ago.

In addition, during the first quarter the Company sold its loss prevention business, LP Innovations, Inc. for cash proceeds of $3 million and a $2.2 million five-year note. The initial gain on the sale of LPI approximated $1.5 million and is included in other income and added an additional $0.02 per share earnings during this first quarter.

Now let's go over the components of operating earnings for the quarter. First, sales, the Company's sales in the first quarter improved by 5.7% overall, with a comparable sales increase of 5.4%. The sales increase occurred in all channels. The retail stores improved by 3.2%, and the Company's direct business increased by 20.8%. During the quarter the Company's catalog circulation increased by 36%. At the same time the Company's Web business which is part of direct, improved by 53%, gaining from added traffic to the Web which was partially driven by increased catalog circulation. Also increased Web marketing, and we believe also macrotrends towards Web shopping.

The direct channel sales penetration, that is the percent of direct sales to total sales, in the first quarter approximated 14% compared to 12% during last year's first quarter. During the quarter CMRG opened six Casual Male stores, relocated three other Casual Male stores and renovated two Casual Male stores. Also the Company closed one Rochester store. At the end of the first quarter our total store count was 510 stores with 1,860,000 square feet of leased space. For the balance of the year the company is planning to open two Casual Male stores and four Rochester stores, close up to 13 Casual Male stores and relocate six other Casual Male stores. Targeted end of the year store count should approximate 504 stores.

Let's talk about gross margins. CMRG's overall gross margins improved to 43.8% during the quarter from 41.4% from a year ago for an improvement of 240 basis points. During the quarter gross margins improved not only from less promotional activity and lower sourcing costs, but also the first quarter benefited particularly by having less clearance fashion merchandise compared to a year ago and therefore less clearance markdowns. Going forward the Company expects gross margin to continuously improve by an approximate 100 basis points on a quarter-over-quarter basis.

CMRG's occupancy costs rate improved by 50 basis points during this first quarter while its merchandise margins improved by 180 basis points. CMRG's inventory position is well positioned in both its core, as well as fashion productlines with much improved in stock by size on hands in the stores. Inventory levels have increased to $103 million, up about 12% from a year ago. However, Casual Male's fashion inventory is flat to last year. Both Rochester and Casual Male as I sad are well-prepared for the upcoming Father's Day selling period.

CMRG's SG&A expense base increased by 5.9% to $39.4 million, although approximately $900,000 is associated with the rent charges incurred on the corporate property lease resulting from the recent sale leaseback transaction. After adjusting for these rent charges SG&A increased by approximately 3.5% from year ago levels, or approximately 20% on incremental sales from last year's first quarter. SG&A levels are expected to show similar levels for the balance of the year except in Q4 when there is an approximate 10% bump related to the approximate 40% seasonal jump in sales levels.

Overall the Company reported this morning net income of $1.4 million or $0.04 per fully diluted share compared to a net loss of $1.9 million or a loss of $0.05 per share last year's first quarter. In that the Company has demonstrated to the accountants that it will be able to utilize its net operating cash losses going forward, this year's earnings incorporate a tax provision at our effective rate of 39.5% whereas last year no tax provision was made. Those tax losses incidentally approximate $75 million and therefore the Company will be paying only minimal cash taxes until it fully absorbs those tax losses.

The Company's capital expenditures for the quarter approximated $2.6 million compared to $1.8 million a year ago. The company is expected to incur approximately $18 million in capital expenditures for 2006, dropping to about $10 to $12 million in 2007. Even after considering this year's CapEx levels the Company's free cash flow is expected to approximate between $20 to $25 million.

CMRG's debt decreased by approximately $55 million from year ago levels, and the Company's $90 million revolver facility was unutilized at the end of the quarter. The only primary debt outstanding today is the approximate $95 million convertible notes with the coupon rate of 5%.

This concludes my remarks about the first quarter results, and now I will turn the call over to David.

Thank you, Dennis. First quarter 2006 represents our 10th consecutive quarter of positive comparable store sales. Certainly the driving force behind our continued improvement in the top line has been product. Through a combination of keeping our core day in and day out product on the shelves and by offering a better assortment of fashionable product through our proprietary brands, we've gained customer confidence in their shopping experience. And traffic in our stores continues to improve as does our average transaction.

First quarter sales were driven by an outstanding performance in our tops categories, both knits and wovens. Harbor Bay and 626 Blue, two of our private-label programs had an excellent start to our spring season. Also our guaranteed in stock program on our key core items continues to deliver healthy increases over last year. In terms of specific items, strong performers are pique polo shirts, screen T-shirts and cargo shorts. And Sport Coats, have also shown significant gains compared to last year, and we had a stellar launch of our exclusive Caribbean Joe line.

With the steady improvement in comp sales we also are experiencing a continued increase in gross margin compared to last year. This quarter's 240 basis point increase in gross margin is a result of several factors. First, we came into first-quarter much leaner in terms of seasonal carryover of inventory so we had less clearance activity. Secondly, we have raised our percent of private-label to 60% from 50% for the spring season. That percent will continue to rise over time, probably settling in at around 70%. And thirdly, we are starting to receive direct source product for the first time. With cost savings averaging of 10 to 15% we will continue to grow direct as a percent of our total purchases. Direct placements by this fall will be around 40% of our total private-label purchases and will be in the vicinity of 60% by next spring.

Based on these strategic initiatives we anticipate continued margin improvement of 100 basis points per quarter over last year for the next two years. This is a milestone day for our Casual Male business. I am very excited to announce that today we have officially changed the Casual Male big and tall franchise to Casual Male XL. From a customers' point of view, the big and tall moniker no longer exists. Our signage, shopping bags, credit cards, gift cards, direct-mail pieces, catalogs, our website -- all have the new logo of Casual Male XL.

The interiors of the stores have all been transformed to the new XL design. As far as status update on the rollout of the new exterior sign package, over 100 stores have installed the new sign and an additional 40 to 50 stores will be converted on a weekly basis. Almost every store except for 21 stores that are up for relocation or closer over the next year or two will have been converted by late June. There are still several stores that are in the permitting stage today.

The stores which have not yet had their permanent sign installed all have temporary banners in place today until their permanent installation takes place. We have been planning this changeover for over a year. We're excited and we are now Casual Male XL, and the results from our test markets continue to support the decision for the overhaul. And hopefully we should see quantifiable improvements in traffic and transaction over the next few quarters.

In terms of marketing, in the March through May time period, this year we cut back the number of days we had a promotional event by 50% compared to last year, and we still managed a comp sales increase over this time period. As any retailer would attest, it is extremely difficult to wean oneself off the promotional cadence without sacrificing the top line. We have found that relying too heavily on off-price events may drive top line sales for us but certainly not gross margin dollars. And a significant part of the improvement we're seeing in gross margin is attributable to a reduction in promotional event markdowns. And we now are better utilizing our markdown dollars for clearance to ensure our seasonal inventory kept clean on a timely basis. And we will continue to be price sensitive around the key selling periods for our business -- Easter, Father's Day, Back-to-School and Thanksgiving weekend.

Outside of that, we will use our marketing dollars through more brand image direct mail pieces and continued investment in our direct channels of catalog and Internet. I have often commented that CMRG will continue to grow its market share in big and tall. Not only through new store openings and comp store increases, but by finding opportunities in this niche market that make sound business sense. And I am pleased to announce that we just acquired a company called Jared M. Jared M. is an apparel company founded by Jared Margolis about twelve years ago that specializes in selling custom clothing to professional athletes, almost all of whom are big and tall.

We see this specialized business as a future growth vehicle for our Rochester division. Custom clothing is a growing category in the menswear business. However, it is an area where Rochester has not been a part of that growth. When David Stern, the Commissioner of the NBA announced the new dress code guidelines, we assumed that Rochester was going to benefit greatly. And as it turned out, we didn't get the business. Subsequent to that disappointment, we have diligently researched the sector of the business and sought out an acquisition that would be scalable to utilize Rochester's store base, its Internet and its catalog channels of distribution. And in this specialized marketplace we concluded that Jared M. has the best reputation for quality and fashion style.

Utilizing our existing real estate and our sourcing capabilities, we see tremendous upside in this acquisition. The initial plan is to open up Jared M. shops within several of our high-profile Rochester locations throughout the country. The Rochester stores custom business today is in the low single digits as a percent of total sales. And Jared M. will dramatically improve upon that performance. Parallel to a brick-and-mortar presence, we will launch a transactional website and produce a Jared M. catalog.

CMRG's strategy will be to take this current fragmented industry to a higher level, and we will launch our first collection for Rochester in Spring '07. Meanwhile, Jared M.'s current business continues to grow with its current business model. Sales were in the $3 million range for '05 and should increase in the neighborhood of 30% this year. This endeavor fits into our long-term strategy to gain market share in the big and tall market, in the high-end to the low-end consumer we can leverage our platform and infrastructure for continued growth in the future.

And we will now open this webcast to any calls.

(OPERATOR INSTRUCTIONS) Tom Filandro, Susquehanna.

Good morning. Great job. Good quarter, congratulations. Question on TV. I am not sure if you guys are doing TV or not; can you update us on if you are, how long it will run and what the thought process is as it relates to the type of advertising. And then I have a second question, just an update on the Sears cobranded catalog, the success of that and how much circulation do we see in that going forward? Thank you.

In terms of TV, the TV ad actually broke last night. It is on cable. It is a 30-second spot. It will be running between now and Father's Day on stations such as ESPN, some of the field and stream type programs. We will also be on some female-oriented channels for Father's Day such as Lifetime and Oxygen. It is important to note that this is a test. We are spending no more than we would on one direct-mail piece. We will review the results of this on a weekly basis. There is no plan in the current budget to continue this into the fall season unless we get the results we're looking for.

The commercial itself is really driven on the fact of the tag of why the average when you could excel -- the idea is again big guys have class and fashion style, and again really catering towards the younger guy, the more fashionable guy out there today. So again, we will review the results and go from there.

In terms of the Sears cobranded catalog, we're very pleased; we are exceeding our plan. Again we've been mailing in the neighborhood of about 250,000 Sears customers that were currently not part of our database. And as time goes along we will be getting access to more of their customers to prospect for future growth.

Great tag line by the way David; one follow-up question. Can you tell us what you guys paid for the Jared M. brands or the company or how it works?

It was s $2.5 million cash acquisition, Tom. And Jared has an opportunity to earn up to another million dollars over the next two years depending upon performance.

Thank you very much. Best of luck.

Marc Bettinger, Stanford Group.

Congratulations. A couple quick questions. In terms of the acquisition, do you see it being accretive at all this year or neutral?

No, not really Mark. I think that this year there is going to be a -- our effort is going to be focused toward setting up the infrastructure to grow Jared M. really starting in 2007 and outward. The website, the catalog, the setup in the Rochester stores all of which David had mentioned, all of that setup work in preparation is going to be going on this year. Meanwhile Jared M. will be running the business as we bought it, and that does generate some profit but not terribly significant to the overall numbers.

So you will be pouring investment into it this year is the point?

Yes, and it is more soft capital as opposed to hard dollars.

Okay.

(multiple speakers) is not a lot of capital expenditure; it is more organizing the effort and getting our team here to work on the catalog, the website and plans for the stores, etc.

Okay, and these -- I think you said you can expand this by opening shops within the Rochester stores?

Yes, we are going to pick some of our key markets, obviously New York; we are looking to California, Houston, Miami where there is a strong professional athletes and residents. And some of Jared's strongest markets. Allocating some space there will be finished product on the shelves plus of course the custom piece of the business.

Okay and quickly Dennis, I think you said what, 504 stores at the end of the year?

Yes I did.

Okay and $20, $25 million in free cash after CapEx?

Yes sir.

The SG&A -- the two numbers you gave, the 5.9% and the 3.5% -- which number is do you expect on an annual basis for '06?

I think that when you look at our SG&A for the first quarter realizing that $900,000 of that that increase from the prior year is associated with the rent charges, I think what I am trying to communicate here is that SG&A base is really a relatively steady base that we should be expecting in Q1, 2 and 3. And then in Q4 of course as we have always shown, we have about a 10% bump in SG&A levels resulting from the increased volume that we experience in quarter 4.

Right, okay, so the $900,000 obviously is ongoing, and I understand what you're saying about the earlier pays, so we are in the first three quarters really looking at the kind of on the 6% level of growth?

Correct.

I mean over '05?

Well, focusing more on the dollars than the percent we have to go back to last year and recompute the percent. First-quarter percent happened to come out to be 5.9%. Those dollars in Q2 and Q3 similar to Q1, whatever the percent amounts to from prior year, I don't know it its 6% or something different.

And last question, David, in terms of the sales, you seeing higher traffic or higher conversions?

We're definitely seeing the traffic improvement. I think the days of the negative traffic that we used to report are behind us; we have consistently improved on the traffic. Conversion is holding pretty well with where it has been. Its important to note conversion will come down with the sign change. That is a good thing for us. We're getting a lot of new bodies into the store for the first time and we are getting a lot of regular size guys coming in out of curiosity and looking at the product. We don't have their size and then they are obviously not going to make a purchase. So traffic will accelerate and conversions will drop a little bit.

Okay. Congratulations again, everybody.

[Brian Ornick], [VLR Capital Partners]

Great quarter. A couple questions. Just to clarify the SG&A, did you say that Q2 and 3 for this year should be $39.4-ish million?

Not to be that precise, but it should be in the neighborhood of what Q1 showed.

Fair enough. And Q4 you're looking at about a 10% bumb off of last year's Q4 or off of the $39.5 million range now?

Off of this year's quarter levels.

Great, regarding the comp inventory on a per square foot basis, do you guys have that available?

What was the question?

The comparable inventory on a per square foot, is it about the 12.9% increase?

Yes.

Pretty much cause you are running about the same number of stores?

That is correct, not a great difference, correct.

That inventory over last year is almost all in our core product to support our guaranteed in stock programs.

Fair enough. One more clarification. The same store sales increase of 5.4%, does that include the direct to consumer sales?

Yes, it does.

Okay, so do you have -- does the retail store increase 3.2% did I hear?

That is correct.

Okay, great, thanks guys. Good luck.

Gary Giblen, Brean Murray.

Can you give us an update on the cost of customer acquisitions that you are incurring somewhat high cost and trying to rebuild the upscale catalog base from I guess from the former rep catalog? Is that effort still ongoing, and is that impairing SG&A even a little bit?

I think that not so much the upscale rep, but overall we have increased our prospecting activity on the direct side, Gary, as we indicated earlier. Probably 20% of our circulation in the first quarter and really throughout the year will be devoted to prospecting activities. So it has obviously that costs some money that is incorporated in our SG&A increase. Partially causing the 3.3% increase in SG&A otherwise outside of the rent charges that I mentioned. The efforts are going well. Obviously we are only through the first quarter of it and studying the results, but we plan on continuing that activity through the year.

Okay, so it's going to continue, okay thanks, and also can you give us some sense of the sequential comp pattern within the quarter and whether weather had a meaningful impact on that?

I think we were fairly consistent throughout the quarter. We didn't have any major shifts by month outside of what you heard from other retailers. Of course we had the shift of Easter from March to April as everybody did.

And then the, in your stores which are skewed a little bit lower to mid income which I realize is not the core customer, but do you think that gas prices are decreasing customer frequency? I mean certainly retailers are finding that there seems to be another wave of gas impairment on customer traffic and also on sales.

We haven't noticed anything dramatic, although we do continue to see this accelerated movement to the Internet. It continues to outperform our expectations, and that will be okay. If our customers get more acclimated and comfortable using the Web to purchase from us, that's fine, and again that would eliminate the gas issue of getting in the car and thinking about driving to our stores.

A further, we haven't seen a gradation in our business in our outlet business so much either, so gas -- I mean we are obviously watching closely but haven't seen any great impact on our business.

And on the future initiative for (inaudible) I guess on young men only mall based stores, is that definitely going to happen, and what timeframe would that be happening in?

It's an idea that we have. It's not even in our strategic plan at this point. That would be several years down the road when the population really starts to gain traction in that age group. We don't see that there is just enough customers at this point to even put up a prototype at this point in time.

What were the proceeds realized from selling the loss prevention subsidiary?

Cash was $3 million, Gary, plus the company has a $2.2 million note that will be paid over a five-year term.

And what is the immediate use of those proceeds?

$3 million we used in effect to acquire the Jared M. business.

Okay, pretty much paid off there. Good luck with that Jared M. initiative. It sounds like it could be big.

Scott Krasik, C.L. King.

A quick question on marketing. I guess where are you guys at with your loyalty program, and when do you make a final decision there?

We will probably have our final decision by Father's Day, and we are scheduled for let's say in August/September launch date of loyalty.

What are you guys seeing in your test markets right now? The difference between the two programs?

Again, we need more time to measure the point side because it is not instant gratification. We have to see what the redemption is going to be as they are building up points in time. And again, we are not going to make the comment on that until we make our final decision.

Okay, and then a question of the Jared M. How had the demand stores right now or how have they been selling?

It has been on a one-on-one situation where Jared or the stylists meet at the hotels or the homes of these NBA players and athletes, and that is how he works his business. He has a showroom currently in New York that we are going to be relocating to and upgrading for him. But there is no store structure to the business as it is today.

So is this like a celebrity jeweler or something like that where there is really word-of-mouth and it could pop up on TV interviews or whatever -- they are proud of their suits?

Well the sporting industry, these guys pretty much are they are very apparel driven and they know who the players are out there and actually the nice part about Jared's businesses he has been limited; he has not been able to take on any new clients because he is maxed out with his current infrastructure. So that is one of the nice parts about it is once we get him set in the infrastructure and we could really start to take on a lot more athletes right now that want to buy his product but have not been able to.

I guess my question was more then does it go into a buzz once the stores are in Rochester, do people want to go there just because.

That's what we are hoping. We would love for these players to come in for the Rochester store buy Jared M. and then along the way pick up a lot of Rochester apparel, too, whether its underwear or a sports coat that they will see on the rack that they like. So it plays very well into their hands. And again as we are seeing statistics out there that in the better men's business custom clothing is growing to be about 20% of their sales. At Rochester its in the low single digits. So this is a very strong play for us to really build a reputation as a custom house also.

Okay, good. And just lastly, as you guys reduce your level of promotionality and fewer days, what are you seeing from your mass and department store competitors? Are they getting more promotional theme or does it not matter?

The department stores are highly, highly promotional, and that is the battle that we face. But we picked our strategy is that we are going to out play them in terms of having inventory in stock, selection, service, exclusive brands. And we believe more fashionable on the spot type of product. We are not going to play the promotional game buy one, get one free, buy one get one half price. It doesn't really do much for us anyway. And that is how we are going to combat them.

Good. Just last one, for fall what percentage of your inventory will be geared towards for young men, I guess and how you would classify that whether it is 66.

I would say its in the low teens. But considerably higher than it has ever been.

Paula Kalandiak.

Roth Capital. My question also relates to Jared M. Can you tell me if -- do you need to hire tailors on-site for your stores to service a Jared M. customer?

The beauty of that is we already have on-site tailors in all our Rochester stores.

And you will be able to use the same ones?

We will be able to use the tailors for the fittings, that's correct.

And how does the margin of custom merchandise relate to the margin of ready to wear?

It's higher.

Can you quantify at all?

Not at this time because we are going to be doing our own sourcing through our direct office. So we haven't put the models together but that is just in the very initial stages right now. We will be able to talk about that probably the next webcast.

Great. Thank you.

(OPERATOR INSTRUCTIONS) Charles Yim, (indiscernible).

I have a question regarding your forward guidance for gross margin improvement. You've had some really great gross margin improvement the last couple quarters; it looks 340 basis in Q4, 240 in Q1 and I am kind of curious as to why your guidance is so conservative. If you sense benefits from direct sourcing and you are less promotional wouldn't you estimate to have greater than 100 basis points in margin expansion?

The second quarter promotionally we line up fairly well because we are not as promotionally driven as we are in the first quarter so we are not going to get the benefit on the promotional event schedule in the second quarter. The second point is this first quarter we came in much, much leaner in terms of the fall carryover that we had to clear out a year ago. That was a really big benefit to the business. We continue to say that we think this 100 basis points improvement will be solid, and again now quarter going forward -- now we are going up against margin improvements of a year ago of over 100 basis points. So again collectively up 100, on 150 and 100 on 200, and then fourth-quarter 100 on 340. We think we are very comfortable in that zone. And again that is a pretty big movement for us to say we could continue for the next several quarters.

One last point too, Charles you mention direct sourcing and direct sourcing is a source of improvement, although it is emerging, it is a very tiny element of our margin in quarter one. Quarter two will begin to see a bit more of it. But it's really an evolving improvement that will be taking place really throughout the year as our receipts begin to grow from direct source sources. Again most of our direct sourcing is on more of our commodity business where we own a substantial amount of inventory at one price and we are replenishing it in direct. So as Dennis is saying, it takes time to feel the impact of direct sourcing. It doesn't happen overnight.

So our intention was to talk about on this call to point it out because as you say the natural inclination is to continue showing that kind of improvement. And we are telling you that we do not see this kind of level of improvement continuing quarter-over-quarter for the balance of the year.

All right, so I suppose the margin improvement will decelerate to more normalized rate?

That's what we're saying.

Okay thank you.

Tom Filandro, Susquehanna.

Couple of follow-ups; first David I don't think you should ever tell anybody what the margins are on that business because they wouldn't believe you anyway. I'm sure they are tremendous on the Jared M. business. I have a follow-up question on the inventory side. I am a little confused, I think you said that inventories are up 12% in total but I thought I heard a question about store level inventory. Can you just clarify on the store, on a comp store basis what inventories are running?

Our direct channel inventory, let's start answering it that way, has also increased somewhat to take care of the increased business that we're seeing obviously on the direct channel side. So when you include just retail inventories Rochester and Casual Male, they are up about the same level.

They are?

Yes.

My second question is is there any regional differences that you experience in the first quarter on the business, Casual Male in particular?

Yes very much so. Our Southern stores are performing; the northern stores -- there is a considerable difference. Which is very good for us because we're reading out of the South our spring product, and based on some early results we are seeing in February and March, we were able to react and increase our positions in time for Father's Day. What is selling in the South in February and March is now selling in the north this week. So it is a very good read for us and it's a good indicator that we should continue to see a pretty good second quarter.

Terrific; one other question please on the Jared M. again. Did you provide at all what their annual sales were maybe in '05 or could you?

It was about in the neighborhood of $3 million.

And on the outlet business, comments on how that business is progressing and any change in how you are viewing outlet?

Outlet is going very well; again as I commented before, we used to treat the outlets as a dumping grounds for the full price stores' mistakes. Last year we recalled 250,000 units of really overstock dead inventory and pushed it into our outlets, which really have severely hurt them over the course of time. We have changed that philosophy. This year we have recalled zero. The outlets for the fall season will be receiving 100% fresh product, mostly private-label that we have developed through our direct office. We are already seeing very good results. Its like product and what is very interesting to us on a like product whether it is a PK polo shirts or a pocket T the sell throughs on a weekly basis are higher in our outlets today than in our full price stores. We are counting on outlets outperforming the full price stores in the back half of the year. Although we only have 67 of them, so it can't really tip the scale too much.

And one final question, David, is you are obviously trying to expand the market reach within that big and tall niche, and when do you go head to toe, when do you add shoes to the mix?

That is certainly on our radar screen. We are going to be investigating that. We are looking at bringing in some players in this business. We think footwear is a tremendous opportunity. Again, specializing in the big sizes, the wide width sizes where selection is very limited out there for guys of size. So we think it is a natural extension for our business and certainly something that we will be working on this year to have something in place for next year.

Thank you again.

Just a follow-up. Could you guys quantify the Easter shift?

It doesn't affect us because it all came within the first quarter but last year Easter was in March, and this year it was in April, so most retailers had weak Marches and stronger Aprils when you're comparing apples-to-apples. So that is one of the reasons we report quarterly sales. We believe in it, it takes a lot of the noise out of trying to explain things on a monthly basis.

Could you at least maybe say the Easter shift between March and April sales was somewhere between 4 and 6% or 2 and 4%?

I couldn't answer that; I'm not sure what the actual shift is. Again we don't look at it that way.

Okay.

Scott Krasik, C.L. King.

Just quickly following up didn't you test some Reebok Shoes a year or two ago, what happened with that? And how would this be different?

Reebok does very well for us. It is in the -- we carry it in the chain of Casual Male along with their apparel, and we have some strong brands. Another strong brand for us is Sketchers and we have New Balance, but we're very limited in what we can sell giving it the proper amount of square footage. What we are talking about in footwear is trying to really start off with building the Rochester footwear business, which is as a percent of sales they do half the business, the Casual Male does. We think there is an opportunity. But the real opportunity in footwear will come through our multichannel website and catalog opportunities.

Okay. Thanks.

There are no further questions.

Thank you all for joining us on this call, and we look forward to sharing with you the results of next quarter. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect.